PR and reputation management: when should the towel be thrown in?

(Update***They’re on a roll…another bill has the bonuses taxed at 100 percent.)

While driving home last night and listening to Marketplace on NHPR, the lead story was, of course, the AIG bonuses. If you’ve been living under a rock for the last 48 hours or so, I’ll fill you in–AIG has paid out bonuses using bailout funds no less, to its derivative trading group–you know, the ones whose actions had a pretty big part in the current economic mess we’re in. According to reports despite the widespread criticism and consternation of the president, the bonuses *have* to be paid out due to existing employment contracts.

Although some seem to view PR as an unnecessary expense in situations such as AIG’s, I’ve always thought that even in difficult times (or perhaps especially in difficult times) guiding a company’s public relations is not only a laudable goal, it’s in the best interest of a company’s stockholders (which in AIG’s case is largely the government–i.e. us). Why? Because if done correctly it can rehabilitate a company’s image, sending the message that “we have changed, and we’ll do things right from this point forward. Give us a chance, and we’ll re-earn your trust.”

But actions speak louder than words, and with this most recent move one has to wonder if AIG even cares that from a reputational perspective it has become the Enron of the insurance/finance world. While I understand his ire, I think Senator Grassley’s solution is a bit much. The right thing to do would be for those who did receive bonuses to issue a mass mea culpa and forgo the money. I’m not holding my breath. (Although as I write this, Congress is figuring out a way to get the money back–through a 60 percent tax on the bonuses.)

And, frankly, even that might not help. My guess is that if AIG survives, we’ll see a breakup and rebranding effort similar to that of Arthur Anderson-becoming-Accenture following the Enron debacle.

Sometimes a reputation is too far gone to try and save.

Are all media the same?

House Speaker Nancy Pelosi has sent a “carefully worded” letter to the Justice Department, asking that they view television, web, and online advertising businesses as competitors to newspapers in “any future antitrust review.” The letter was sent as newspapers across the country continue to fold–and not in the good way. By broadening the definition of who is a ‘competitor’ to newspapers, the makeup of consolidations and mergers would change significantly–changing the players could allow for more cooperation. But joint efforts don’t always end with better results. This piece from the San Francisco Business Journal points out that both the Denver Post/Rocky Mountain News and the Seattle Times/Seattle Post Intelligencer tried to combine certain functions; the Rocky Mountain News folded in February and the Post Intelligencer went online only yesterday.

What is missing from this is an understanding of which audiences are served by which media outlets, how those audiences overlap and where they differ, and what impact this will have on the people in affected markets. I’m sure we’ll hear more about this, as the Speaker has announced that hearings will be held on the issue in Congress soon.

About The Author

Jennifer Zingsheim Phillips is the Director of Marketing Communications for CARMA. She is also the founder of 4L Strategies, and has worked in communications and public affairs for more than 20 years. Her background includes work in politics, government, lobbying, public affairs PR, content creation, and digital and social communications and media analysis.